Oh Dear

While Macro Man has been cycling halfway across Massachusetts, his mates have been sending him some rather ugly charts.

The DAX has looked terrible ever since Germany won the World Cup. Apparently peripheral weakness is a more formidable opponent than the Brazil team:

Meanwhile, the more speculative grades of credit seem to have decided to price at least a smidgen of the liquidity and leverage risk premia that Macro Man wrote about a week or two ago:

Whether this is the beginning of the Big Kahuna correction still remains to be seen, of course. Suffice to say, however, that the days of 5+ Sharpe lazy longs in speculative credit look to be over for the time being.

Agreed on steepeners, Anon @ 2.03. In fact, if anyone wants to put on a steepener, you can save time by just putting the money in an envelope and sending it to Gary Shilling, Jeff Gundlach and yours truly. We appreciate the gesture.

A very small toe into Spoos tonight, encased in a Kevlar sock, naturally. Lower vol tends to indicate a bounce isn't far away. Fully expect Eurostoxx to do the same thing and for it to last for a week or two. As long as DAX 8900 holds there will be some dip buyers out there. It's not as though there can be completely sh*tty EU economic data releases every day (famous last words).

MM finally got his wish in the shape of a falling EURUSD. Mind you we were all wishing for that about 18 months ago, when it seemed to be suspended above 1,40 on a set of invisible wires (aka Abe/Yellenomics). I guess EUR longs have finally started feeling QEasy.

NZ is notably absent from the Russian import ban list. While it does make sense (see here) that a whole lot of European dairy will need to find a new home, I cannot see Fonterra and the kiwi suffering more from this than gaining from one hungry new customer. Thoughts?

Nice post , MM, trading amongst these market players is tough going, but Yes, we still like the previous trade for a number of reasons that only a trader with foresight into a future beyond tomorrow can recognize that one day we can keep the desk going. Ps..bleeding on the desk still counts for something these days.